Tipster Pleads Guilty In Hedge Fund Insider Case

Sep 5 2012 | 10:00am ET

Prosecutors have won yet another guilty plea—and another cooperating witness—in their insider-trading crackdown.

Hyung Lim, a former Altera Corp. executive, admitted yesterday that he passed confidential information to Whittier Trust Co.'s Danny Kuo. Kuo then allegedly passed those tips to three hedge fund employees, including the co-founder of Level Global Investors.

Both Lim and Kuo, who pleaded guilty in April, will testify against Anthony Chiasson, former Diamondback Capital Management portfolio manager Todd Newman and SAC Capital Advisors analyst Jon Horvath. That trial is set to begin on Oct. 29 in New York federal court.

Kim, who was also sued by the Securities and Exchange Commission yesterday, also admitted to passing confidential tips about Nvidia Corp.—the stock at the heart of the case against Chiasson, Newman and Horvath—that he received from a friend in that company's accounting department.

"I knew that Kuo wanted the Nvidia information so that others could trade Nvidia stock," Lim told the court. "In return for providing this information to Kuo, I received cash and other items of value from Kuo, including material nonpublic information concerning other publicly-traded technology companies, which I used to trade on my own account." Kuo also helped pay for Lim's gambling habits, covering his debts and even wiring $5,000 to a Las Vegas casino on one occasion.

Lim allegedly earned or avoided losses of at least $90,000 with those tips. Prosecutors have said that the "criminal club" earned more than $60 million in illegal profits.

Lim, who met Kuo at poker games organized by a mutual friend, pleaded guilty to conspiracy to commit securities and wire fraud. He faces up to 25 years in prison when he is sentenced and remains free on $100,000 bond.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.